The board of directors of ACE Limited (ACE) will propose a 3.1% increase in its annual dividend at the annual general meeting to be held on May 21, 2015. If approved, this will be the twenty-second straight year of dividend increase. Its consistent efforts towards building shareholders’ wealth renewed investors’ confidence in the stock, driving shares up by 0.5% in yesterday’s trading session.
If approved, ACE Limited will pay a quarterly dividend of 67 cents ($2.68 on an annualized basis), up from the present 65 cents ($2.60 on an annualized basis).
ACE Limited has maintained a consistent track record of paying quarterly dividends and increasing its dividend payout each year. The current hike is therefore not an exception. Over the past five years, the company has doubled its payout. Importantly, this property and casualty insurer hiked its dividend twice. A sustained solid operational performance at the company continues to support its capital deployment initiative and in turn increase shareholders’ value.
Based on yesterday’s closing price of $114.78, the company’s dividend yield is 2.33%, much above the industry average of 1.21%.
The board of directors also declared a quarterly dividend of 65 cents per share to shareholders of record on Mar 31, 2015. The dividend will be paid on Apr 21, 2015.
Besides continuous dividend increases, this Zacks Rank #2 (Buy) insurer also aggressively buys back shares to boost its bottom line. Since the inception of its share repurchase program in 2013, ACE Limited bought back 14.5 million shares for $1.5 billion through Dec 31, 2014. It also has a $1.5 billion share repurchase approval through 2015.
Several insurers have hiked their dividend to reward their shareholders. Last week, Old Republic International Corporation (ORI) increased its quarterly dividend by 1.4% while RenaissanceRe Holdings Ltd. (RNR) increased its quarterly dividend by approximately 3.5%. Another insurer, Argo Group International Holdings, Ltd. (AGII) also increased its quarterly cash dividend by 11.1% last week.
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